* Yen erases earlier losses vs other majors
* Yen rises as Chinese shares fall more than 2 percent
* U.S. recovery doubts linger, curbing gains in high yielders
By Satomi Noguchi
TOKYO, Aug 19 (Reuters) - The yen rose versus other major
currencies on Wednesday, as a fall in Chinese shares made
investors cautious about returning to risky investments.
In early Asian trade the yen fell broadly after robust U.S.
corporate results gave support to Wall Street and helped boost
growth-linked currencies such as the Australian dollar.
The Japanese currency later regained its footing as investors
trimmed yen short positions amid concerns about the outlook for
Shanghai shares, said to be the main driver of current moves in
the absence of major economic data.
The yen's gains picked up steam in the afternoon as Chinese
stocks extended their decline to fall 2.4 percent <>.
Analysts say worries remain that stock market valuations are
stretched and running ahead of economic fundamentals.
In particular, they worry about the resilience of the U.S.
recovery and what will happen when stimulus effects wear off.
"The market is very conscious about movements in Chinese
stock markets to see if there is any sign that the Chinese
economy could be facing a change for the worse," said Takahide
Nagasaki, chief FX strategist for Daiwa Securities SMBC.
The dollar fell 0.3 percent from late U.S. trade on Tuesday
to 94.42 yen <JPY=>, off an earlier high near 95.00 yen.
The euro fell 0.4 percent to 133.36 yen <EURJPY=R>, having
pulled back from an earlier high of 134.50 yen and inching back
in the direction of a one-month low of 132.51 struck earlier this
week on trading platform EBS.
Against the dollar, the euro <EUR=> dipped 0.1 percent to
$1.4127, off an earlier high just above $1.4170 but remaining
supported by Tuesday's better-than-expected German ZEW data.
[].
High-yielding currencies such as the Australian and New
Zealand dollars dipped, with the Aussie dollar easing 0.1 percent
to $0.8260 <AUD=D4> and the kiwi slipping 0.1 percent to $0.6740
<NZD=D4>.
The Aussie had hit an 11-month high on Friday while the kiwi
reached a 2009 peak, before both retreated in the face of a
sell-off in risky assets that has gathered pace since late last
week.
"We are basically seeing some consolidation after the sharp
moves on Friday and Monday," said Katie Dean, a senior market
economist at ANZ.
"We will see more volatility and choppy trades given that not
much is happening in terms of events. So any correction to stock
markets could be a key driver for currencies."
The U.S. market <.SPX> gained 1 percent on Tuesday helped by
better-than-expected results from Home Depot Inc <HD.N> and
Target Corp <TGT.N>. []
U.S. stock markets have risen more than 40 percent since
their March low. Meanwhile the Shanghai composite index <>
is more than 50 percent higher than at the start of the year,
though it has shed more than 15 percent in the past two weeks.
Sterling <GBP=> dipped 0.2 percent to $1.6523, erasing some
of its sharp gains made the previous day after unexpectedly high
core British inflation. []
(Additional reporting by Anirban Nag in SYDNEY and Masayuki
Kitano in TOKYO; Editing by Chris Gallagher)
